Two more San Diego's office towers now belong to The Irvine Co., after the company spent a reported $450 million to buy the city's One America Plaza and the Koll Center. The Irvine Co., which now owns six of the city's best-known downtown properties, has committed investments totaling nearly $1 billion there--a hefty concentration in a market with a relatively small central business district.

A spokesman for The Irvine Co. noted that San Diego's educated workforce, entrepreneurial spirit and similarity to the company's home-base of Orange County, justifies the level of investment. He would not confirm the price, however, the spokesman did refute another rumored reason for such concentration: to increase the market's rental rates.

Bill Flaherty, a senior vice president with fellow Southern California investor Maguire Properties, told CPN this afternoon that aggregation in one market is the modus operandi for firms like his and The Irvine Co., because it provides unequaled local knowledge and efficiency. Maguire Properties owns more than 40 percent of the downtown Los Angeles office market.

"It gives us the ability to literally see everything happening in the market and at times to influence the market," Flaherty explained. In San Diego, The Irvine Co.'s investment activity "is probably very important to that city."

What role The Irvine Co. will play in influencing the city's rents seems uncertain, at best. One America Plaza was not even on the market when The Irvine Co. set its sights on it, and decided to pay more than $500 per-square-foot for it, according to some reports. GE Pension Trust paid just more than half that when it acquired the building in 2002.

But Flaherty pointed out that San Diego has risen to the top of nearly every list for its performance and growth potential, even surpassing perennial favorite Washington, D.C. in the Urban Land Institute's Emerging Trends report. "It's a relatively small office market, but it has an incredible energy," he observed. "That creates greater barriers to creative office space, which probably leads to Irvine's interest."

Both the Irvine Co. spokesman and Flaherty added that Irvine Co. will keep a sharp focus on San Diego. "If history is any guide," Flaherty added," they (will) be there for the absolute foreseeable future."